New checks on estate agents begin
- 17 November 2010
- From the section Business
A licensing scheme aimed at protecting home buyers and sellers from unqualified estate agents has been launched by an industry body.
But it has failed to end disagreement between the National Association of Estate Agents (NAEA) and the government over formal regulation.
Anybody can set up business as an estate agent in the UK without qualifications or formal checks.
The NAEA hopes the licensing scheme will be a badge of honesty for agents.
"Nobody would knowingly get into an unlicensed taxi. However, thousands of people are willing to entrust one of most important transactions of their life to people who are not qualified or experienced," said Peter Bolton King, chief executive of the NAEA.
"We would like all sellers and buyers to ask their prospective agents if they have a licence. If they do not, they should ask themselves whether that is the best place to market their property."
The NAEA, which represents about 10,000 people in the property industry, said that it was aware of the poor reputation of estate agents.
Mr Bolton King told the BBC that it was "crazy" that anyone could set up in the business.
The new scheme, which would be available to NAEA members, would offer a licence to members who:
- Hold a recognised qualification
- Are covered by professional indemnity insurance
- Can provide accountant's reports when client money is held
- Take 12 hours of training on the latest developments in the sector each year
As members of the industry body, they must keep to a code of conduct, which includes guidance on issues such as when marketing calls can be made to people's homes.
Those who break the rules can eventually end up at a tribunal, where fines can be levied of up to £5,000 for each rule that is breached.
They could also be thrown out of the scheme.
However, there appear to be few exact targets set on how the scheme would be judged as a success or not, apart from increased membership of the NAEA and signs of greater consumer awareness of the licensing scheme.
If estate agents' customers are unhappy with the way the NAEA has dealt with a complaint, they can go to the independent Property Ombudsman.
He has powers that include the award of up to £25,000 in compensation.
The licensing scheme is the latest move in a disagreement about the extent of regulation in the industry.
The NAEA is still calling on the government to legislate and lay down formal regulation, as in the case of solicitors and other professionals in the house-buying industry.
Housing Minister Grant Shapps, who was at the launch event in the House of Commons, said that the in-house licensing scheme was a symbolic moment.
"I always said you should have a go at sorting it out yourselves," he told NAEA members.
But Michael Jones, president of the NAEA, said that the group would continue to call for formal regulation.
In February, the Office of Fair Trading (OFT) gave a largely clean bill of health to estate agents after a year-long study into standards in the industry.
The consumers' association Which? has also accepted that self-regulation in the industry could be appropriate and work for buyers and sellers.
But in a report published in June 2008, the former head of the OFT, Sir Bryan Carsberg, called for more regulation of the industry.